Sunday, 31 May 2009

Article 18 of the present TEC, ie the Treaty establishing the European Community, on pdf page 49 here runs as follows:

1. Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in this Treaty and by the measures adopted to give it effect.

2. If action by the Community should prove necessary to attain this objective and this Treaty has not provided the necessary powers, the Council may adopt provisions with a view to facilitating the exercise of the rights referred to in paragraph 1. The Council shall act in accordance with the procedure referred to in Article 251.

3. Paragraph 2 shall not apply to provisions on passports, identity cards, residence permits or any other such document or to provisions on social security or social protection.

i.e. the EU has no powers over ID-cards and the like. However, Article 35 to the Treaty of Lisbon, on pdf page 11 here would remove that prohibition:

Article 18 shall be amended as follows ...

(b) paragraph 3 shall be replaced by the following:

For the same purposes as those referred to in paragraph 1 and if the Treaties have not provided the necessary powers, the Council, acting in accordance with a special legislative procedure, may adopt measures concerning social security or social protection. The Council shall act unanimously after consulting the European Parliament.

Thereby putting documentation concerning "social security or social protection" within the ambit of the EU, while removing the present prohibition on EU interference with respect to "passports, identity cards, residence permits or any other such document".

Meanwhile, Article 62(3) to the Treaty of Lisbon (pdf page 29), creates the power for the EU to take legally binding decisions about those other documents such as ID cards:

If action by the Union should prove necessary to facilitate the exercise of the right referred to in Article 17(2)(a), and if the Treaties have not provided the necessary powers, the Council, acting in accordance with a special legislative procedure, may adopt provisions concerning passports, identity cards, residence permits or any other such document. The Council shall act unanimously after consulting the European Parliament.

Denis concludes thusly:

"This is how the EU project proceeds; not in a manly, frank and transparent fashion, but slyly and surreptitiously. With cowardly, sneaky little specimens in back rooms conniving to gradually change the wording of complex treaties that ordinary people don't have the time to read and analyse, mainly because they're trying to earn an honest living, and with fellow travellers then pretending that it's all got nothing whatsoever to do with the EU."

On TV, just now, Andrew Marr asked The Goblin King whether he would stand down as PM if the other members of the Cabinet asked him to do so. The Goblin King replied "No." (and then waffled for a bit). Andrew Marr's interrupted his waffle with this: "So you'd take the pearl-handled revolver and shoot them?"

Andrew Marr gets a bonus point for interrupting to point out that the Tories, UKIP and BNP are "very different, of course" when The Goblin King tried to lump them together, but this was barely audible.

Saturday, 30 May 2009

Marks & Spencer got a lot of free publicity several years ago by launching a rumour that they'd charge higher prices for larger brassières, faux outrage ensued and the 'plan' was shelved. The repeated this stunt again this year, with the inevitable outcome, lots of press coverage, yadda yadda.

Somehow or other, their cunning PR department has managed to hash a story together out of the facts that the woman, whose breasts appeared in the infamous We boobed advertisement, a) exists, b) has a name, c) lives in London and d) used to be a 'youth worker', I mean, Jesus H Christ, how mundane can you get?

The punchline in the 'story' is that she told The Sun: “I nearly crashed my car when I saw the advert for the first time”. It's a nice photo and all, if you like that kind of thing, but how would she have known that they were her boobs, unless she had been told beforehand, in which case it wouldn't have been a surprise, would it?

Just for info, here's the picture that accompanied the article in The London Paper:

Here's an artist's impression of the Conservatives' candidate for the Essex County Council elections in my ward, Buckhurst Hill and Loughton South, Mrs Valerie Metcalfe (yes, the one who wants more housing and no more housing):

Little did I expect to witness the public and relentless execution paper by paper, news report by news report, hour by hour, of a decent, hardworking, minor public figure who has been ruthlessly hounded as if she was a major public enemy. Guilty until proved innocent has been the media mantra over the last few days.

Trial by media is normally a bad thing, because it's unnecessary when there is a judicial process. But there is no such process for MPs.

Maybe we should do so, and allow these MPs to justify their actions. After all, this is exactly why we have a jury system. That someone can steal a car to take a dying child to hospital and that 12 men can decide that the theft was justified. So, let's see Kirkbride in court justifying her decision like any thief would have to. Or alternatively, a means to call for an election mid-term.

Almost every Sky and BBC news report involves sending a ‘team’ to discover what the locals in Bromsgrove are saying about Julie. This entails interviewing those signing a ‘Julie Must Go’ petition being organised by George Galloway’s Respect Party. (Not that I have heard that mentioned by Sky or the BBC).

And who organises it is entirely irrelevant. If the people of Bromsgrove are signing it, you should get the message: they want her out.

Firstly by being married to Andrew MacKay she is tarred with his brush. The fact that he has fallen on his sword means the spotlight swivels onto her. There are several Cabinet Ministers who enjoyed grace and favour residences and thereby failed the ‘reasonableness’ test on claiming for second home allowances like Andrew.

They remain in post and in residence and one would have thought were more worthy of media outrage than Julie who after all, as David Cameron pointed out, has a perfectly legitimate claim while living in London and owning a flat in her constituency.

If you think that voting Conservative will restore any sense of "personal responsibility" back to civil society then think again. Even burglars and fraudsters don't try and justify their behaviour by saying that "everyone else is doing it".

But the accusations now levelled against her drip by drip, day by day, are to do with her employing or using members of her family to help run her family and parliamentary life.

Because such behaviour generally stinks of nepotism.

There are millions of small businesses where family members help out in one way or the other. In doctors or dentists surgeries, in small legal practices, in shops, in factories, wherever you look families are helping each other and many of them rely for their income from the public purse.

If you are working in the free market, employing your idiot son or your incompetent uncle is like robbing from yourself. To pay them means raising your costs or lowering your profits, so you don't do it.

Even if you are a small business working for government, you are subject to things like competitive tendering and service level agreements.

The difference is that MPs don't work like that. Their expenses aren't fixed or based on a formula or subject to much competition (except maybe when the election comes around every few years). Paying someone extra doesn't personally cost them much.

So Julie lets her brother live rent free in a small bedroom in her constituency flat in return for which he looks after Angus weekend after weekend. (For the avoidance of doubt I know he does because I have seen it). He helps her buy IT equipment for her office use because he knows about it and she does not. He sets up her website and does what a retired elder brother might do for his sister anywhere else in the country without comment or vilification.

And I'm sure that the business that's registered at the address in his name is all about the her son/helping the people of Bromsgove too.

What planet do these people live on? While most employers are considerate to their employees having families (like taking time off to look after sick children or having first pick of summer holiday dates), they basically consider that your costs for your children are your business. Why does someone from the Party of Individual Responsibility expect me to pay for the accommodation for their children and child-minder?

Julie also employs her sister part-time who happens to live in Dorset. The accusation is that because she lives in Dorset she can’t know anything about Bromsgrove. Nonsense, if she’d lived in London they wouldn’t complain and no doubt she has been to Bromsgrove often enough. She’s a professional woman who is networked into Julie’s office both in Westminster and in the constituency and her job is to deal with Julie’s constituents problems when Julie’s full time PA is away or on holiday.

Let me get this straight... she was employing her PA at £12,000 a year to cover sickness/holiday/training, yes?

You can hire a PA in Bromsgrove for about £20/hour. Working 37 hours a week, that suggests that her "full time PA" takes 16 weeks off per year. Sounds like a hell of a lot of time off for a full time employee.

The media is now so wound up about Julie’s family involvement that I am surprised she is not being compared to Silvio Berlusconi!

I'd rather have Silvio. He seems to fuck a lot less people than most of our MPs.

Of course, the circus will soon move on and Julie may or may not survive – although I pray she does. But it will leave behind a badly damaged family, a little boy who may face a torrid time at school and a horrible taste that anyone can be treated as guilty of misusing their position, misusing public funds and tarnishing democracy when all Julie Kirkbride has ever, ever done is what she believes was the best for her constituents, her party and her country.

What young mum will want to go to the Mother of Parliaments now?

Oh fuck off. Thatcher ended up as prime minister when it was a women-unfriendly place and her party weren't exactly open to having women MPs. And not once did she piss and moan about the press or her family.

This week's Fun Online Poll shows a clear preference for multi-member constituencies (only a minority support staying with first-past-the-post, see in particular these results). As it happens, multi-member constituencies form the basis of the d'Hondt voting system which is used for the elections to the EU Parliament, due again next Thursday, 4th June 2009, so we can cover both topics in on go.

(AFAIAA, the EU elections work on the basis of party lists, but this is not necessary. We could tweak it that each party puts up as many named candidates as it wants and everybody votes once for a single, named candidate, with each party's seats being allocated to their candidates in order of the number of votes they achieved personally.)

It's quite a neat system, actually, but the way the system is usually explained, while correct, is rather tortuous, so here's my crash-course in forecasting the results for any particular UK constituency, using the likely vote shares reported by PoliticalBetting a couple of weeks ago*:

1. Set up a spreadsheet, with parties and their votes in the left hand column (total votes do not add up to 100%, but that's the way they were reported). You don't have to arrange them in descending order, but it makes it a bit easier later on.

2. Type in the numbers 1 to 6 across the top of the columns, which is enough to cover most constituencies (unless the leading party gets a much, much larger share of the votes cast).

3. Divide each party's votes by the number in the top of each column (for example, Lib Dem, get 14% of the votes, so the result in the column headed '4' is 3.5%. Whether you use 14% or 140,000 votes out of 1,000,000 is irrelevant).

4. Allocating seat is then easy - you just look for the biggest X numbers, where X is the number of seats in the constituency. I've allocated the first ten seats because the largest UK constituency at the EU elections (the 'South East', excl. London) has ten seats (pdf); Northern Ireland and the North East, with much smaller populations only have three each. I've shaded the ten biggest numbers grey to make it easier to visualise:

The Tories get the first seat (28%); Labour get the next one (20%); then UKIP (15%); the next two go to the Tories and Lib Dem (14% each); then Greens (11%); then Labour (10%); then Tories (9.3%); then UKIP (7.5%); and finally Lib Dem (7%, assuming they manage to just pip the Tories by a fraction of a per cent).

Final result:Tories: 28% of the vote, 30% of the seatsLabour: 20% of the vote, 20% of the seatsUKIP: 15% of the vote, 20% of the seatsLib Dem: 14% of the vote, 20% of the seatsGreens: 11% of the vote; 10% of the seats

This worked example produces a 'fair' result, but noticeably 'fairer' to the Lib Dems than anybody else (unless the Tories had just beaten them to the final seat, in which case the Tories would have been laughing), but that's the fun part - smaller parties prefer larger constituencies (the more seats there are, the closer the relationship between % share of the vote and % share of the seats) but it helps you, relatively speaking, if your party is awarded the final seat...

For example, in this constituency, it would have suited UKIP if there were only three seats (they would have achieved 33% of the seats for only 15% of the vote) and it would have suited Labour if there were only six seats (they would have achieved 33% of the seats with only 20% of the vote). With the benefit of hindsight, the Tories would have preferred the constituency to only have five seats (in which case they would have achieved 40% of the seats for only 28% of the votes), and so on.

I expect to spend the evening of Sunday 7 June in front of the telly with a lap-top while I process all this in real time.

Friday, 29 May 2009

Let's round off the working week* with a fakecharity which Tim W mentioned en passant a couple of days ago.

I present: The Eating Disorders Association, aka 'beat'.

It's got a textbook fakecharity webpage, and utterly dishonest accounts. At the bottom of page 5 it says rather coyly "The public sector via the Department of Health and the Department of Children, Schools and Families contributed 11% of our total income".

Yeah, right.

Notes 5 and 6 on page 13 shows £99,215 income from training, conferences and publications (which sure as Hell is paid to them from other government bodies) and grants from BBC Children in Need, Big Lottery Fund, the Departments of Health and Children, Schools & Families, The Health Foundation, The Impetus Trust, Mediabox and V for Volunteering of £275,556, making £374,771 received from the government, out of total income of £781,020 (from page 9), which is more like 48% of their total income.

* I drafted this at 5 o'clock but our systems at work crashed so I'm pressing 'publish' now on my arrival home.

I don't normally watch QT, but Nigel was on yesterday so I gave it a whirl. Towards the end, either Caroline Lucas (of the Green Party) or Caroline Flint (of the Labour Party) was saying that one of the reasons the UK needed to be in the EU was because it somehow helped in the fight against international terrorism.

Hmm.

At the risk of generalising, as I don't have time or inclination to research all this down in infinite detail...

Let's look at places in Western Europe that aren't in the EU; that's the Isle of Man, Channel Islands, Switzerland, Norway, Iceland. Hotbeds of international terrorism? Nope. Austria joined the EU as recently as 1995, was it the epicentre of international terrorism before that? Nope.

Now, think about the countries where most terrorists live. The UK is probably top of the list due to its open-door immigration policies for people from Somalia and Pakistan, for example (and due to France waving them all through Sangatte), but Germany and Spain (and maybe The Netherlands) rank fairly high as well. If a terrorist with an EU passport rocks up at the border of another EU country, they more or less have to let him in (unless it's a dangerous lunatic like Geert Wilders, of course).

From the point of view of all the other countries, they'd probably be safer from terrorism if the UK left, to be honest, as then they'd be able to turn back people they didn't like the look of, even if they were waving a British passport.

A sheriff has warned that millions of homes across Britain with window blinds may contain a potentially lethal trap for young children. In a written judgement into the death of Clackmannanshire toddler Muireann McLaughlin, Sheriff David Mackie called for a ban on looped blind cords.

Yes, we have kids and care passionately about safety, we were forever putting stuff out of the way, using dummy plugs, opening and shutting child gates and ... er ... making sure that the looped blind cords were safely out of reach, but you can only go so far.

If they banned everything that had ever killed anyone then we simply wouldn't have much left, would we? We certainly wouldn't have windows in upper storeys, garden ponds, washing machines, cars, bicycles, stairs, television sets, lids on biros and felt-tips, gas or mains electricity in our houses, cats or dogs, any object smaller than golf balls etc etc.

Spot the glaring error in this otherwise superbly pedantic letter in today's FT:

Sir, John Taylor describes how inflation will bring down the federal debt-to-GDP ratio (Exploding debt threatens America, Comment, May 27) but his arithmetic is wrong.

Ten per cent year-on-year inflation would result in 259 per cent increases in price in 10 years, not 100 per cent as he states. Surely as a professor of economics he is aware of the "rule of 72" whereby "only" 7.2 per cent inflation would result in a doubling of prices every 10 years.

If he indeed knows this then he intentionally misleads; if he doesn't then the Hoover Institution, of which he is a senior fellow, needs to enlist a more competent mouthpiece to promote their right-wing ideology.

John L Frank, Chelsea, MI, USA.

Highlight to reveal the answer:Ten per cent inflation for ten years increases prices by 159%, not 259%!!! I hope he and the FT are kicking themselves.

I just don't get this whole outcry about the German government buying up General Motors' European operations.

For sure, it breaches the EU rules against state subsidies (an example of Good EU Rules, but as ever, they only apply to countries other than France or Germany, so in practice they are fairly worthless).

For sure, they'll shut down Vauxhall and keep Opel going, and up to 20,000 jobs will be lost in the UK (taking the upper end of the range suggested by the BBC, i.e. 5,500 employees at Vauxhall plus all the jobs at suppliers etc).

But let's not forget that there is chronic over-capacity in car manufacturing - because of this macho idea that £1 earned from manufacturing and exporting a car is somehow worth more than £1 earned from something girly like inward tourism - and that even German car manufacturers are shifting production eastwards because of the cheaper labour.

Let's assume the UK government were to enter and win the bidding war and take over Vauxhall and Opel*, they end up with two loss-making companies**, at least one of which has to be shut down pronto (in the vain hope that supply-capacity and demand will be brought back into line), so they would shut down Opel (to protect 'British jobs for British workers') and end up with an additional colossal bill for redundancy payments and so on. Divide £1.25 billion by the 20,000 UK jobs we have 'saved', that works out at a princely £62,500 per job, plus a pro rata share of the cost of shutting down Opel, and the rest.

Is it not better for Peter Mandelson (or Lord Thingy of Whatsit, as he is now known) to draft another one of his press releases announcing that although, sadly, Vauxhall is to be shut down, the German government has kindly offered to pay each Vauxhall worker a £25,000 redundancy payment and chip in a few million for 'local regeneration' in Luton and Ellesmere?

Or do we, the taxpayers, really want to underwrite the next British Leyland? I personally do not want to own shares in Vauxhall, neither directly nor indirectly, and I don't see why the UK government should force me to do so. Losing half our money on bailing out Lloyds/HBOS and RBS hardly recommends the UK government as a sound investor, does it?

* Actually, it does beg the question of why GM is selling off Vauxhall, Opel and Saab as a job lot. If they played their cards right and appealed to the protectionist instinct of what are, broadly, socialist-populist European governments, GM would end up selling Vauxhall to the UK government at overvalue, Opel to the German government at overvalue and Saab to the Swedish government at overvalue, but hey, they haven't even got the hang of debt-for-equity swaps yet.

Thursday, 28 May 2009

One reason to be suspicious of referenda is that the result can depend largely on how the question is phrased.

I doubt whether there is any huge groundswell of support for proportional representation (quite which type is the least-bad is another topic*) in this country (and I can't say that the topic excites me greatly), but if you turn the logic on its head and ask "If we had Proportional Representation, would you vote for... a) Either Conservative or Labour, or b) One of the other parties" it seems that only fifteen per cent would still vote for one of the two parties who have taken turns in running the country for the best (worst?) part of a century (and whose policies largely overlap).

Surely, if there were little or no support for PR (but it were introduced anyway) then those who oppose it in principle would be morally obliged to cast their votes for either Labour or The Tories to preserve the status quo? Or have I missed something?---------------------------So the next question is, "If we had Proportional Representation, which system would you prefer?"

Vote here, or use the widget in the sidebar.---------------------------* I'm all in favour of merging all existing constituencies into dual-constituencies. Everybody then gets one vote and can vote for one candidate (who may belong to a party or be independent). One seat per constituency is allocated on a first-past-the-post basis. The other seats are allocated as 'top-up-seats' to parties (or lists or alliances etc), so that each party's share of the total seat allocation ends up being proportional to their share of the national vote, with the top-up seats being allocated to unsuccessful candidates on the basis of how many votes they achieved personally. Everybody then has two constituency MPs whom they can badger, which gives us a bit of competition between them as to who better serves his or her constituents.

Wednesday, 27 May 2009

He kicked off with the standard objection to PR, that having coalitions with smaller parties leads to more pork barrel spending - the example given is the DUP who were infamously a thorn in the side of Sir John Major's Tory government and who did not, repeat not demand any special favours in return for supporting the very unpopular 42-day detention bill pushed through by the current Labour government.

I countered that if the standard argument using the DUP were valid, then logic says that in the USA, with a two-party, first-past-the-post electoral system there would be very little pork, which is quite clearly not true, as evidenced by the 480 pages and $150 billion's worth of pork that was tacked on the George W Bush's bank bail-out bill, that was originally supposed to cost $700 billion.

Hmm.

Lola cut the Gordian knot by mentioning Belgium, which also has a huge amount of redistribution and which is basically two quite distinct regions welded together into one country. Which makes me think that we can narrow down 'pork' in the widest sense into a few distinct categories:

1. Vertical distribution by income - i.e. higher and average earners pay for welfare and universal benefits (NHS, State education) 'enjoyed' by lower and average earners; but by the same token, lower earners subsidise the tax breaks for pensions and so on on 'enjoyed' by higher earners.

2. Pensions tax-breaks are the prototype for 'righteous' pork whereby an industry (windmills, smoking withdrawal products, asbestos removal etc) justifies its subsidies by referring to some wider public benefit - if the pensions industry can get away with The Big Lie that 'we have to encourage people to save' (social engineering at its worst) then it is but a small step to saying 'we have to encourage people to go green' or 'we have to encourage people to stop smoking' or 'we should pay to keep our children's schools asbestos-free' (despite white asbestos behind a layer of plaster and a few coats of paint is totally harmless and best left alone).

3. Industry-specific subsidies (which overlap with regional subsidies) - if you were an MP in an area with manufacturing, you'd call for subsidies for manufacturing; if you were an MP in a rural area, you'd call for more agricultural land subsidies; if you were an MP in central or west London, you'd call for tax-breaks for film-making and so on.

4. Regional subsidies (which in turn overlap with 'nationalist' subsidies), i.e. if you were a Scottish MP you'd oppose higher taxes on whisky; if you were a Welsh MP you'd call for less regulation of sheep farming or subsidies for mountain climbing; and if you were a Northern Irish MP you'd basically hold the UK government to ransom and point out that unless the rouble keeps rolling, The Troubles will start again (one of Tony Blair's great insights - the price of 'peace' in Northern Ireland is, er, a very high price in £-s-d).

5. Nationalist subsidies (which overlaps with the West Lothian Question), Scottish MPs of whatever party will always demand more cash for Scotland and so on.

6. The crassest subsidy of all - that of home-ownership, whereby the average earner pays vast amounts of tax merely to prop up the value of 'his main asset', and then has to pay more tax to cover the deadweight costs of the tax (i.e. welfare for those made unemployed by the taxes on production; or Housing Benefit for people who can't afford the resulting high rents, which only serves to push rents up even higher) - is not usually mentioned in polite company, but there are huge figures involved.

7. Then there are all the extra layers for every extra layer of government or bureaucracy, like Regional Assemblies, the EU (or in the case of the USA, State and Federal government).

Now ask yourself, how can we tweak the electoral system to reduce pork?

Like most great theories, this'll never be perfect, but having full devolution for England would be a good start (that gets rid of nationalist subsidies), as would getting the UK out of the EU.

Although the idea of having one MP per constituency has its appeal, the drawback is that they will dump any sort of basic principles if they sniff an electoral advantage from having regional/industry specific subsidies to benefit their own voters, so this must be borne in mind when considering the idea of national party lists (it's also a bad idea, but for different reasons) - at least a truly national party could concentrate on the interest of the nation as a whole (i.e. a national party would have no qualms in approving a Heathrow expansion - the gains outweigh the losses in economic terms and the winners far outweigh the losers in numerical terms).

Vertical redistribution (in either direction) is a question of education - surely it makes more sense to net off the upward and downward flows as far as possible, so that there is a bare minimum of redistribution in one direction only?

'Righteous' subsidies are also a question of basic economics - if it is accepted that smoking and using petrol are Bad Things (done simultanously they can be disastrous) then let's just tax them rather than subsidising whatever is perceived to be the opposite thereof, and cut taxes elsewhere.

Finally, the cartel of the home-owners' party (that's LibLabCon) can only be nibbled at if there were a party who could capture the votes of the significant minority of young people, tenants, entrepreneurs, higher earners, people looking to trade-up or who'd like their children to be able to buy a house etc. who would always vote to shift taxation from incomes and production to land ownership. Given where we're starting from, such a party only has a chance under proportional representation. The party would face a staunch opposition of older home-owners with lower incomes, landlords and pensioners (to whom some of their voters would desert later on...), but such is life.

As readers may have noticed, I have adopted a slightly longer-term approach this month - rather than trying day trading*, I just gambled on being able to stay solvent longer than the markets can stay irrational. I sold this one back on 8 May on the assumption it was a fish, which it wasn't (oops!). So I had to sit tight while I went $4,000 minus and then back into plus again. The last trading day for the June contract is in the next couple of weeks so I thought it opportune to cash in now and await the next half-way decent 'sell' signal comes along for the September contract and then sit on my hands again for days or even weeks.

* To recap, March profits £1,000; April profits £1,400; May profit £1,000 - not brilliant, but more or less stress-free.

It strikes me that the choice is not so much between First-Past-The-Post and some form of Proportional Representation, but between a rotating two-party dictatorship and ... something else (whatever that ends up being).

If we end up not liking that 'something else', we can just vote for whichever of the two largest parties comes closer to our own views (and there's surprisingly little difference between them, actually).

So that's this week's Fun Online Poll: If we had Proportional Representation, would you vote for one of the two big parties or would you vote for one of the smaller ones?

Alan Johnson set the electoral reform ball rolling again with this in the Times* and there are one or two worthy ideas in David Cameron's piece in the Guardian, some of which he pinched from UKIP.

One of the most common objections to PR, e.g. as espoused by TFB, is that ".. it is healthier for one party to be able to do its worst and be shot down than to have a series of compromise solutions that satisfy no one."

Fine. Let us start by imagining a system with only two parties. Parliamentary majorities would be larger under FPTP than under PR, but apart from that there wouldn't be much difference, seeing as laws are enacted by simple majority. If voters were happy with a rotating two-party dictatorship, then the objection to PR falls flat on its face. I fail to see why core Labour voters, especially those who live in safe Tory seats would be happy with this (or vice versa), but maybe that's just me.

However, we have more than two parties. If we had PR and most people opposed it, they could continue to vote for either Labour or Tory and not much would change; but would Labour voters in Tory areas really vote Tory to maintain the political see-saw at national level (and vice versa)? I doubt it somehow.

So there we have it - even under PR, voters would still be able to maintain the rotating two-party system if they so wished; and those who prefer a smaller party or live in what would otherwise be a safe seat would know that their vote counted.

What's not to like?

* The AV+ idea seems a tad gimmicky to me; my preferred system would be first-past-the-post-with-top-up-seats, which I outlined here.

Monday, 25 May 2009

This illustrates one of the key problems of the quangocracy - people on the government's payroll trick themselves into believing that they are improving matters and they know that whistle-blowing while in the job is a one way ticket to ignominy and obscurity - so the whole charade is self-sustaining.

But waiting for nine years after leaving a job before you point out that the body you headed is a load of crap just doesn't cut it, as far as I am concerned.

The first Mrs W took our children abroad back in 1994 (it wasn't exactly out of the blue, but not the sort of behaviour a father would have got away with).

German law (f*** knows why that applied, seeing as we were living in England prior to separation, but hey) requires that the father pays the mother maintenance as long as the children are under 18, so being a nice chap, I have paid EUR 605.11 every month ever since (it was slightly less for the first couple of years).

May 2009, when the younger one turns 18, seemed a long way away back in 1994, but it's finally arrived ...

You can scroll three-quarters of the way down the transcript of Andrew Marr's inteview with David Cameron to read the full exchange, or just watch Andrew Marr interrupt Dave's wafflings with a glorious, technicolour "It sounds like UKIP are right" about half-way through this video:

As to Dave's contention that "... the more people who vote Conservative on June 4th, the greater the pressure there will be on Gordon Brown to hold that referendum that he promised" ... doesn't he mean "the more people who vote UKIP"?

Andrew Marr interviewed David Cameron this morning, and asked him whether he would have a referendum if the Tories won the next General Election after the Lisbon Treaty/Constitution had already been ratified.

Dave just waffled and waffled of course and refused to give a 'yes' or 'no' answer. Unless my ears were deceiving me, Andrew Marr hit back at the waffle by saying "So UKIP are right, then." The transcript should be available here soon and I hope that they leave that bit in.

Also nice was seeing Selina Scott tell Charlie Kennedy that she wanted there to be a referendum on the Lisbon Treaty/Constitution.

Saturday, 23 May 2009

When this story first broke, those who commented reckoned it would be very difficult for them to shift the cash.

It's now reported that they've fled the country with NZ$ 2.3 million of the NZ$ 10 million that was erroneously credited to their account - what the public wants to know (or me at least) is how on earth did they do it?

OT1H, leaflets made of stiff card are much easier to poke through letterboxes, but OTOH, they can really hurt*:*The white patch is just my finger squashed onto the flat bed scanner, it's the red bit that stings.

Friday, 22 May 2009

On my return from leafletting just now (three hundred in under two hours - that was Good Leafletting Territory!) I found the one from the Tory candidate on the doormat, in amongst the boasting about £285 million of 'extra' spending, oops 'investment', is this from the front page:

"My priorities are ... Challenge inappropriate intrusion into the Green Belt and preserve our local heritage and culture"

and this from the reverse:

"We will fight to give communities the right to decide how much housing they need"

So what's it to be? If people in a small flat in her 'community' want to move to a bigger house in the area, the only possible place that it can be built is The Hallowed Green Belt (by definition). She caveats the first priority with the word 'inappropriate', which is either a meaningless flourish to make an unreasonable priority seem reasonable, or the most important word of all - so it would be helpful if she could state, quite clearly, what she means by "appropriate".

But she wouldn't of course, because she needs the votes of the NIMBYs and the votes of the people stuck in small flats, who could easily afford a house if the council were less illiberal with planning permission. Or perhaps she squares the circle by believing that cramming people into small flats in a borough surrounded by miles of Green Belt is in fact part of the 'local heritage and culture' that she wants to preserve?

The FT has further discovered that Ms Moran used her Commons staff to work for Equality Networks (EQN), a non-profit group of which she is the non-remunerated chair. Michael Booker, her fiancé, is one of two company directors. The company, which states its profit “goes back into regeneration, jobs and skills to some of the most deprived communities in the UK”, offers services including research, training and “influencing”, defined as “legislative advice, relationship building and arranging meetings to parliamentary receptions or political briefings”...

When EQN bids for funding were unsuccessful, Ms Moran repeatedly used Commons-headed paper to intervene with local authorities and Whitehall departments to express her “concern and amazement”. EQN received grants in 2008 from public bodies including £10,000 from Luton Borough Council for local regeneration funding, and £20,000 from the East of England Development Agency’s Investing in Communities programme for a “feasibility study” into a local women’s business centre...

In 2007, Ms Moran claimed £6,052.49 expenses from EQN itself. Another EQN director, Nicholas Murray, asked Ms Moran to include more receipts with her invoice. She replied that she had lost many of them.

I've found that with economics, the 'answer' is usually quite simple, it's the explanations that are frighteningly long-winded. This doesn't mean that simple or obvious answers are always the correct ones, although in some cases they are.

Take for example, the responses to my Tax survey Part 3, if you accept that states have to raise money by taxation (and even the smallest state that provides 'core functions' only and spends less than ten per cent of GDP) then it is better (or 'less bad') to tax "The use of limited or pre-existing resources" than it is to raise taxes from "Wealth creation by individuals and businesses", and seventy-six per cent of people who responded agreed.

I do wonder what arguments there are to say that taxing "wealth creation" is preferable, unless of course the twenty-four per cent who voted for it know where this is heading ... hence the title of the post.-----------------------OK, the final round is general knowledge: What did Milton Friedman say was the "least bad tax"?

The nicest roads for leafletting are rows of semi-detached or terraced houses with small front gardens of course; detached villas with big front gardens are a bit of a pain, but the best/worst of all are blocks of flats, which fall into three categories:

1. The best kind are those with letter-boxes on the outside or in an open lobby, because you can do a dozen leaflets in a minute and move on.

2. The OK kind are blocks with an unlocked front door, but where you have to walk up several flights of steps and push a leaflet through each front door as you descend again*.

3. The worst kind are those with a locked front door, where you have to hit a buzzer at random, count to twenty and if nobody answers, hit another one. You keep going until you lose your nerve or somebody answers and you have to beg to be granted access. I've noticed that if a woman answers, she usually takes pity on you and lets you in, but men are totally pig-headed. I suppose you could sub-divide this into a worst-of-all category where you have to be buzzed in and where you have to walk up several flights of stairs.

Just sayin', is all.

* If you're leafletting for UKIP, you worry about being attacked by a BNP voter who regards you as a traitor to their cause and/or being attacked by a non-white who confuses UKIP with the BNP - so the logic is, if you push through the leaflets on the way up, you might be accosted on the way down again by somebody who's already read your leaflet, so doing the reverse gives you a marginally better chance of being able to make a run for it.

Thursday, 21 May 2009

[The Goblin King] was given a rough ride by Martin Broughton, CBI president, who claimed the [fifty per cent] tax rate had been introduced to divert attention from the government's "failure" to control its ballooning budget deficit. The British Airways chairman said the additional tax take was likely to be minimal but its effect would be to send a dispiriting message to wealth creators.

As Mr Brown listened, Mr Broughton challenged the government to review its spending priorities and focus on its core activities to bring down the budget deficit. If business were responsible for the deficit it would reform public sector pensions, tackle the "mismanagement" of services and discontinue non-core activities, he said.

"In the government's position, we would start educating the public to accept that it is not the government's role to address every issue in society," Mr Broughton said. He added: "How many of the 1,000 quangos costing £65bn a year do we really need?"

"The use of heroic growth assumptions, together with a timetable extended to 2018, amounted to a serious failure to address the deficit in a way that gives confidence to buyers of our debt."

OK, Martin Broughton is Chairman of British Airways, who are guilty of plenty of skullduggery themselves, but wouldn't it be nice to hear some plain speaking like this from Camerosborne?

Police are looking for a New Zealand couple who disappeared after a bank mistakenly put $10 million into their account.

The couple, who ran a gas station in the northern city of Rotorua, applied to Westpac Bank for a NZ$10,000 ($6,000) overdraft and had 1,000 times that amount paid into their account. The two then withdrew some of the money and disappeared, Detective Senior Sgt. David Harvey said.

Harvey said Interpol has been contacted for help, suggesting authorities believe they may have fled abroad with the cash...

Wednesday, 20 May 2009

I thought I'd lost my touch in spotting fakecharities, not having identified one since 1 May, but I scented blood in Monday's Metro. See if you can spot the tell-tale signs in this:

One in four pupils is being failed by their secondary school, a report says... "Every child should thrive at school but, as this research shows, parents recognise that is not happening," said Andy Powell of independent education foundation Edge, which wrote the report. "The education system has changed and some schools are doing great things – but it hasn't changed fast enough."

He called on the government to move away from the one-size-fits-all system to one which gives youngsters "the chance to develop their own talents through real world experience"... Signs that children are not happy include late nights out and constantly visiting social networking sites, Edge added.

The Department for Children, Schools and Families said exam performances had improved in the past 12 years. But the ministry accepted "there was more to do".--------------------------------------------I filed it under 'stuff I ought to research a bit more when I have time', but there was a full page advert in today's Metro, featuring an image worthy of William Wilberforce (click to enlarge):

-------------------------------------------Having done my leafletting for the evening, I had a look at their website, the whole layout of which screams "fakecharity", but in case of doubt, look at their Partners:

I appreciate good spin as much as the next man, but why are their frauds so pathetic? If you have a quick look at the website of each of their "partners" you'll notice that they all follow the same tedious fakecharity template. Are they all designed by the same geeks or something?

Mr. Evennett: Can the Minister confirm categorically that any changes to the Lisbon treaty for any country would mean that the treaty needed to be re-ratified? Would the Government then hold a referendum on this matter?

A total of 1.3 million families were underpaid the benefit during the year, up from 800,000 the previous year, with people missing out on an average of £610 each, the HM Revenue & Customs data showed. At the same time £1 billion was overpaid to 1.3 million families, with these people receiving around £705 too much...

It's difficult to say which is worse, but moving on:

A Revenue spokesman said: "Overpayments are not wrong payments. Responsive systems mean that awards can be changed in-year, adjusting to customers changing circumstances. Awards are finalised at the end of the tax year to make sure families have received the tax credits they were entitled to...

Doing a Tax Credits form is about as much fun as doing an income tax return, and they expect 'families' to re-submit claims every time their working hours change; a child ends nursery and goes to school etc. Does that sound very "responsive"? And they ended a sentence with a preposition.

"The level of overpayments is now £1 billion, less than half the level in 2003/04 and 5% of finalised entitlement paid out by HMRC."

Well, whoopie-f***ing-doo!

Overall, 5.98 million families received tax credits during 2007/08, with the average payment increasing by £200 compared with the previous year to £3,611.

I love the spurious accuracy of those figures.

The number of people on low incomes without children who received money through tax credits rose by 10% to 336,000 during the year.

That's the easiest bit to sort out actually: you find the break-even level, where PAYE deducted = Tax Credits paid (slightly above £10,000) and declare that to be the tax-free personal allowance, job done.

Tuesday, 19 May 2009

If you have a vague inkling of economics and the closely related topics of taxes and subsidies, combined with a working assumption that most civil servants are totally clueless and there is no co-ordination between different government departments, it must have been perfectly clear that the car scrappage scheme just would not 'work'. It was just a question of sitting back and wait for it to fizzle out.

For starters, it would only appeal to people driving cars more than ten years old that are worth less than £2,000 but who could afford to buy a new car, which appears to be about six per cent of respondents to this Fun Online Poll. Then there's the issue that an average new car will depreciate in value by £2,000 in less than three months, so it's not much of a bribe.

Then, with a huge overcapacity in car manufacturing and a lack of credit, it is a buyer's market - any new car buyer can easily haggle a discount of fifteen or twenty per cent off list price, so even if there were a notional £2,000 subsidy, it begs the question, what is the base price from which the £2,000 is to be deducted? For real hard-core econo-geeks, there's the kinked demand curve*, which says that small changes in the prevailing market price of cars do not actually lead to large changes in quantity demanded anyway, and with huge stockpiles rusting away, the motor industry cares about shifting numbers as much as whether it makes much of a profit on each one.

Then chuck in tax - the most important tax here is Value Added Tax, which makes up £2,000 of the selling price of an average new car costing £15,000. It would have been a damn' sight easier just to scrap VAT on new car sales and have done with it, of course, but we can't do that because of the EU - so with VAT, there is the fundamental point, should the supplier pay VAT on the selling price before or after deducting £2,000? This appears to be one of the sticking points (although I can't say for sure from the scant reporting).

Finally, stir in a handsome dollop of civil service incompetence and garnish with waffle about 'green cars', and what do you get?

* My own explanation for the kinked demand curve is that the flat section represents private buyers who buy cars for fun, so demand is price elastic, while the steeper demand curve represents people who need a decent car for business use, so their demand is price-inelastic, but hey.

Figures released yesterday in the Bank's annual report showed that in the 12 months to February 28 it raked in profits before tax of £995 million... The profits surge for the Old Lady of Threadneedle Street has already paid a big dividend for taxpayers. The Bank made an initial payment to the Treasury of £203 million on April 3 and a further, similar sum is set to follow in October under rules that require the Bank to hand back a quarter of its post-tax profits to the Government on two dates each year...

The Bank has also earned large amounts from the £185 billion loaned to banking groups in the form of Treasury bills, under its Special Liquidity Scheme (SLS)... As security for its loaned funds, the Bank continues to hold £287 billion-worth of hard-to-trade, illiquid assets that it swapped under the scheme.

*ahem*

1. Why bother distinguishing between pre- and post-tax profits? The tax goes to HM Treasury; half the remaining profits are paid as dividends to its sole shareholder HM Treasury*; and the retained profits belong indirectly to its sole shareholder, HM Treasury.

2. The Bank of England appears to be incredibly badly run. In exchange for underwriting/guaranteeing £287 billion of crap, it has only managed to extort £1 billion from the commercial banks who dumped the stuff. That's barely a one-third of a per cent mark-up.

*/ahem*

* Unless you subscribe to the conspiracy theory that the Bank of England is privately owned.

Jack Dromey, deputy secretary general of Unite union, will ask for millions of pounds in investment to save wind-turbine manufacturing ... Last month the Danish wind company [sic] Vestas said it would close its factories on the Isle of Wight and Southampton... Mr Dromey said the closures would be "a disaster" for government attempts to boost "green-collar jobs" in manufacturing and services for renewable energy. It would damage the country’s prospects of generating more energy from low-carbon sources, he said.

So far so good, that's a large part of what trade unions do - ask for government subsidies. As long as the government politely but firmly tells them 'No', then there's no harm done*. It's amusing that they're dressing this up as 'low-carbon' thing - a couple of months ago the very same trade union launched a national campaign to save car and manufacturing jobs.

But I digress. The highlight of the article must be this:

Union leaders also want improved access to the electricity grid for wind farms, which at present can wait months or even years for a connection to be built.

* In this present case, the government has every intention of squandering £9 billion a year on EU-inspired 'low-carbon' nonsense anyway, so what's a few million between friends?

Lots of cities outside London north have had office->flat conversions in the bubble decade. I can think of several in Liverpool and in Bristol.

*rant*

It's completely stupid - the city-centre offices are converted into city-centre flats, but then all the jobs move to "office parks" on the outskirts of town, so city-dwellers need cars. However there's never enough parking for the new flats, and of course they're tiny inside, so people with jobs move out to the suburbs. City centre flats become slum towns; everyone becomes more car-dependent, making a mockery of the government's supposed green credentials.

The votes for 'poll taxes' and 'jealousy surcharges' cancel each other out and the clear winner is 'flat taxes'. "Flat taxes on what?" is the next question - vote here or use the widget in the sidebar.------------------------I'll skip the obvious question, how much the government should be taxing and spending, because we've done that.

A mother was told to stop breastfeeding her baby boy by a swimming pool as it breached a leisure centre's strict poolside ban on food and drink. Laura Whotton was left fuming when a member of staff said she could not feed 11-week-old Joshua by the pool at John Carroll Leisure Centre, in Nottingham...

Presenter Sophie Raworth said having children badly affected women's pay. Men and women are level on pay in their 20s, but once they hit 30 the gap starts to widen and by the time people are in their 40s the average woman is earning 20% less than a man, she said.

"I think it's no coincidence that the gap starts widening when women tend to settle down and have children," said Ms Raworth "And interestingly women who don't have children tend to continue earning virtually the same as men as they continue in their careers."

Exactly! It's not really a 'gender pay gap', it's a 'mothers vs everybody else pay gap'. Whether or not something 'should be done' about this is a different topic, but assuming there should, whatever they come up with ought to address the actual gap there is and not some imaginery gap which, on closer inspection, doesn't exist.

To the extent that something 'should be done', all I can say is scrap Child Tax Credits and roll them in to a much higher Child Benefit of about £30 a week per child for the first three children per family, and pay that directly to the mother. In cash terms, that will probably make up the 20% earnings differential.

Here's a picture of Ms Raworth, just out of interest:In other news, "Only 7% of men would be prepared to stay at home with a newborn baby if maternity benefits were replaced with parental ones, according to a survey. Even fewer women - 4% - would hand over the role at home to the father, while two-thirds of working mothers said they only kept jobs out of necessity.".

I'm delighted to report that 95% of people prefer in-your-face taxes to stealth taxes, thanks to everybody who took part.

Like many things with tax and economics, this is counter-intuitive, but as Lola explains in the comments to the poll:

Price is a signal. Clarity for state revenue gathering reveals this signal. That's why lefties do stealth taxes. If it was clearly revealed just how much of what you earn and spend went on The State, the taxpayer would not put up with it. In particular I loathe PAYE. No employee reads anything but the bottom line. If employees were paid gross and required to remit their own monthly income tax payment you can bet your bottom dollar rates would go down pretty damn' quickly.

While PAYE, and Employer's NIC in particular, are stealth taxes in that sense, at least people are vaguely aware of the rates and can look up how much is deducted from their pay, it strikes me that the stealthiest tax of all is VAT, which as I never tire of saying, raises twice as much as corporation tax from only half the economy. The myth that this is a tax on 'consumption' needs firmly debunking - it is a tax on turnover of certain types of business.

If VAT really were a tax on consumption then 'consumers' (the very people who are best placed to decide what gets produced) ought to realise that they pay four times as much in VAT as they do in Council Tax, which, being an in-your-face tax is probably the most hated tax relative to the amount is raises, which in the context of this debate seems to be A Good Thing.---------------------------Anyway, seconds out, round two -what's the 'fairest' kind of tax? Vote here or use the widget in the sidebar.

Saturday, 16 May 2009

... allow me to let you in to a little secret. All Formula One drivers are pretty much identical. Occasionally you get one — like Ayrton Senna — who’s 0.1 per cent better than the rest, but mostly they all have the same ability. I mean it. Some are in the sport because their dads paid. Some are there because their dads like to be on television. Some are there through luck and some through persistence. It doesn’t matter though. When it comes to driving, they are all the same...

What matters is the car... And so we arrive at the main reason why Formula One has been turned on its head this year. When Michael Schumacher started winning world championships, he was driving for a team that employed someone called Ross Brawn. When he moved to Ferrari and started winning world championships there, the team employed — Ross Brawn.

And in all that time, only one other team ever consistently mounted a serious threat. That would be McLaren using a car designed by someone called Adrian Newey. This year, of course, two new teams have risen to the top. Brawn, run by Ross Brawn and Red Bull, using a car designed by Adrian Newey.

He might be exaggerating slightly - and mentioning Ayrton Senna but not the evil genius Michael Schumacher is downright churlish - but the facts seem to stack up. Maybe the whole thing is down to Ross Brawn - who doesn't just design the car but make split-second decisions on tyre, fuel and pit-stop strategies as well - and Adrian Newey.

The legal move marks the opening salvo of the Revenue’s effort to extend its crackdown on evasion to all the 500 foreign banks and building societies with a UK presence. It expects to raise £500m over the next four years by prompting holders of undisclosed accounts to come forward... The move follows similar legal sweeps in 2006 and 2007, which forced five British high street banks to disclose details of secret offshore accounts. That crackdown, accompanied by the offer of a partial amnesty, recovered about £400m in unpaid taxes at a cost to the exchequer of just £6.5m.

OK, that makes an average take of about £100 million a year, which sounds like a lot but represents about, er, 0.02% of all UK government revenues. I don't condone tax evasion as such, but I find it a bit difficult to get excited about it in absolute terms. To the extent that we have to tax incomes at all, it does seem fairer to make everybody pay the same flat rate, rather than the honest paying a slightly higher rate than would otherwise be necessary, but isn't it more important to have a system that doesn't encourage tax evasion in the first place?--------------------------Step One is to reduce income tax rates as far as possible to reduce the temptation, of course. The above article refers to tax on interest income. This only works if a UK bank pays interest to an offshore subsidiary (and obtains a full tax deduction) and the offshore subsidiary then credits that interest to its UK-based depositors tax-free, so...

Step Two is to have withholding taxes on the interest that banks pay to offshore subsidiaries (and don't forget that this is a requirement for payments to most tax-havens anyway), or even better*, by disallowing interest payments as an allowable expense for UK businesses or banks and making the corresponding interest income (whether paid to a bank, to individuals or to another company) tax-free.

This is exactly what happens when a UK company pays a dividend out of post-tax profits to a basic rate taxpayer or to another UK company - there is no additional income/corporation tax liability on the recipient** because that income has already suffered corporation tax. On Planet Wadsworth, there will be a single flat tax rate on all corporate or personal income, so by definition there will be no higher rate tax on dividend income or a 'marginal' corporation tax rate*** that is any higher than that.

For sure, there will still be people who keep money offshore (for slightly more sinister reasons), but we could go one better and subject that to income tax as well (to the extent we can track it down), so the effective rate on such income would be nearly twice as high as if they had kept it in the UK in the first place.

That's that fixed. Next.--------------------------* Under various double tax treaties and EU rules, the UK can't deduct withholding tax from interest paid to most non-tax haven countries, so it's a question of either re-negotiating hundreds of treaties or just amending UK domestic law. While I'm on the topic, we could also do away with this nonsense that interest on UK gilts is paid gross but still liable to tax at the year end - why not just pay a slightly lower rate and make it tax-free?

** Unless the recipient is entitled to an age-related allowance which is reduced pro rata if the recipient's total income goes above a certain level.

*** With companies, although the dividend itself is tax-free, it can increase the marginal rate of corporation tax from 20% to 30%, slightly more than the large companies' rate of 28%.

1. I started drawing caricatures in July 2008.2. Like Leg-Iron, "I have trouble going to sleep and I have trouble waking up. Being asleep and being awake, I can do. It's the transition I can't seem to master."3. My little girl's favourite colour is pink.4. Actually, I stopped eating bread (except Roggenbrot = black rye bread) about ten years ago on the basis of a flippant remark that Bonehead made in Hollyoaks, and since then I've had no problems going to sleep (having been awake more or less continuously for the preceding two decades) and I no longer get drowzy in the afternoons. But I still hate waking up/getting up. With a passion.5. My little boy likes football and swimming.6. I am a primarily a simplification campaigner. My enthusiasm for flat income taxes, Citizen's Income-style welfare schemes and Land Value Tax flows from that, rather than the other way round.7. My wife likes watching cookery programmes on the telly.8. I voted Labour until 2001 and joined UKIP in early 2007.

The collapse of a major polar ice sheet will not raise global sea levels as much as previous projections suggest, a team of scientists has calculated.

Writing in Science, the researchers said that the demise of the West Antarctic Ice Sheet (WAIS) would result in a sea level rise of 3.3m (10 ft). Previous estimates had forecast a rise in the region of five to six metres... When the idea first emerged in the late 1970s, it was estimated that global sea level would rise by five metres if the WAIS collapsed. Current projections suggest that a complete collapse of WAIS would result in an increase of up to six metres.

But Professor Bamber said that no-one had revisited the calculation, despite new data sets becoming available, and scientists developing a better understanding of the dynamics in the vast ice sheets. The original estimates were based on "very basic ice thickness data", he explained. "Ice thickness data gives you information about the depth of the bedrock underneath the ice sheet. Over the past 30 years, we have acquired much more ice thickness data over the whole of Antarctica, particularly over West Antarctica. We also have much better surface topography..."

Responding to Professor Bamber's paper in Science, British Antarctic Survey science leader Dr David Vaughan described the findings as "quite sound".

"But for me, the most crucial question is not solely about the total amount of ice in West Antarctica, because that might take several centuries to be lost to the ocean," he told BBC News. "The crucial question is how much ice could be lost in 100-200 years; that's the sea level rise we have to understand and plan for. Even with this new assessment the loss of a fraction of WAIS over those timescales would have serious consequences and costs that we've only really just begun to understand."

So they're pencilling in a 3.3 metre rise over several centuries? Due, WTF? That's hardly something to terrify your children with, is it? They'll have to do a bit of serious rewriting to make it a bit scarier, methinks.

Sir, I find the logic of the insurance industry (Pension tax change under fire, May 14) as unfathomable as an MP’s justification of their moat-cleaning expenses.

Can an industry that has routinely priced low and medium earners out of the private pension market really claim that reducing the tax relief for about 350,000 of the highest earners discourages pension saving?

Pension tax relief is one of the least progressive areas of the UK tax system. If industry bodies really wanted to use it to encourage saving they would advocate turning it on its head, introducing a flat rate of tax relief for all and offering additional incentives to basic rate taxpayers – by increasing government contributions to personal accounts and occupational schemes for example.

I’m sure that would do more to encourage saving among those of us without moats than allowing the highest earners to receive 50 per cent tax relief on their contributions instead of 20 per cent.

Naomi Cooke, National Pensions Officer, Wimbledon, London

What's not mentioned is that she is the National Pensions Officer for the trade union GMB. So she makes half a good point on the regressive nature of the tax break, but why not go one further and accept that any tax break for savings (however flat and however well-intentioned) is of necessity regressive?

By definition, it is only those with surplus income who can afford to put money away, so taking her argument to the logical conclusion, they ought to scrap the relief entirely and use the notional increase in revenues to cut the tax burden on lower earners, by increasing the personal allowance or cutting tax rates (or ideally, a bit of both).

And, in practice, the tax relief doesn't really help higher earners much either, so they really are being bribed with their own money.

The £2,000 incentive under the Government's "cash for bangers" car-scrappage scheme will be wiped out in just 88 days due to depreciation, it has been revealed.

From Monday, owners of cars 10 years old or more will get £2,000 if they trade in their old model and buy a new one. But according to price comparison company uSwitch.com, vehicle depreciation is set to be the "thorn in the side" of the scrappage scheme...

In total, new vehicles purchased under the Government's car scrappage scheme are set to lose £12.5 billion in depreciation after just one year, it said. Purchasing one of the top 10 most popular new cars costs £16,232 on average and this value plummets by 49% in the first year alone, while the UK's best-selling car - the Ford Focus Style - loses £8,635 or 51% of its value in the first year.

Drivers should read the small print on car insurance policies as the write-off value varies substantially between policies... "All drivers who are planning to switch their old cars for a newer model need to be prepared for a hike to their premiums of up to 30%."

Thursday, 14 May 2009

I can still vividly remember walking in to my local Halifax branch in December 2007, asking how much was left on the mortgage, rounding it up to the next whole £100 and handing over a cheque there and then. A week or two later, the Halifax sent me some bits of paper in a nice plastic binder and a refund of the overpayment of about £50 and that was the end of that.

I do feel a bit sorry for those who can't remember such simple - but important - events in life. Perhaps readers would like to share their experiences - can you remember paying off a mortgage? Are some people still needlessly paying hundreds of pounds a month to the bank or building society?

Social enterprise financiers will be eligible for government guarantees on loans worth up to £20m, it was announced this week. Business secretary Lord Mandelson told guests at a social enterprise summit that the government would guarantee loans from accredited lenders to Community Development Finance Institutions (CDFIs) totalling £20m, in an extension of its Enterprise Finance Guarantee (EFG) scheme.

CDFIs provide finance to social enterprises, individuals and businesses in disadvantaged areas which often struggle to access mainstream bank loans "due to the higher risk associated with supporting the groups and communities to which they lend", the government said.

"In the current economic climate, [CDFIs] are an increasingly important source of finance and investment for small businesses and social enterprises that have been unable to access finance from banks," said Mandelson.

The EFG was launched last year with the aim of enabling an additional £1.3bn of capital to be lent to small businesses struggling to access finance following the credit crunch. Under the EFG, the government guarantees 75% of loans to viable beneficiaries.

Answers on a postcard, I'll publish the best few hundred as a book or something.

While I'm on the topic, I'm a tad disappointed that so far 28% of people say they are prepared to ignore the MPs' expenses scandal when deciding how to vote. The only way to get the message across is if all voters say that they will vote against any incumbent who has been taking the piss, i.e. just about all of them except this lot. Whether a lot of voters act differently in the cold light of the polling booth is neither here nor, it's your vote to cast as you please.

Wednesday, 13 May 2009

I thought I had discovered a cure for spider plants a couple of months ago, but here's what the same six pots look like now. Look closely, and you'll see that two are sprouting nicely, three are struggling back to life and one has a suspiciously fat looking root lurking just below the surface:In my defence, the edges of the leaves are looking decidedly ragged, so maybe the slugs will come and finish them off?

Sure, their 'underlying profit before tax'* went up by £55 million, and gross sales in the year to 21 March 2009 are up 5.7% by value (see page 12), but ...

Out of total gross sales of £20,383 million, £1,472 million was VAT. Let's guess that half of that relates to period 1 December 2008 to 21 March 2009 (because that includes the Xmas period), i.e. £736 million. The VAT rate went down from 17.5% to 15% on 1 December 2008, so if Sainsbury's had not passed on the VAT cut, they would have saved about £123 million in VAT (£736 million ÷ 15 x 2.5), so you could argue that all they had to do to achieve this superficially excellent result was to pass on about half the VAT cut and keep half for themselves in extra profits.

Either way, the liability for VAT (The Worst Tax Of All) completely eclipses the corporation tax charge of £177 million for the year.

* If you minus off property losses, profits are down by £50 million, of course ...